New answers tagged

3

The reverse 3x ETN and the daily 3x ETN are not inverse to each other due to convexity and they do not offset each other. Let's say you have 1 million AUM in each (i.e. the ETN delta is +3 million for the 3x and -3 million for the -3x), and the market moves twice by + 5%. End of day 1 : 3x = 1.15 million, etn needs to go long 3.45 million delta (buy +300k ...


1

I think the primary obstacle is the costs involved/potential revenue offered for distributors. ETNs are already uncommon and their market isn't the same as standard equity ETFs; inverse ETNs even moreso. Your proposed benefits also don't hold up. In this case, ProShares doesn't care about hedging, they're just trying to attract assets to get their bps....


Top 50 recent answers are included